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LUBBOCK — A new water tower in Turkey: $3 million. Upgrades for a museum in Stamford: $400,000. A first responders appreciation barbecue in Medina County: $10,000.
These are just some of the public investments data center companies have paid for across rural Texas in the past year.
According to Texas Tribune analysis, data center companies have donated or invested more than $343 million across the Lone Star state for various community needs, including school programs, infrastructure repairs and emergency services. Much of that money has gone to the very communities that have fought against data center development and are seemingly an effort to win over public support through their bottomless bank accounts.
The Texas Tribune reviewed news releases, public meeting agendas and interviewed local officials to understand how data centers are using their money in Texas. Because not every donation is made public, the total — the first of its kind compiled in Texas — is likely an undercount.
Google donated millions of dollars to the Haskell area for its hospital, pregnancy center and other causes. Rowan Digital Infrastructure is giving $38 million to Temple for its water infrastructure, along with more money for STEM Centers at schools in nearby small towns.
Data centers also created community action grants, which are used for recurring investments in the communities they’re building in. Others, such as Google’s Texas Water Impact Fund, provide funds to restore resources that cause concern for Texans or provide direct lump sum donations to both community and state funds.
As data centers move into the state at a rapid pace, Texas communities in mostly rural areas face a fiscal cliff from property tax cuts, inflation and overall economic uncertainty. Over the last year, data center companies have stepped in as a white knight of community investment.
“There is no question that these data centers are an opportunity for rural communities that are living in the margin,” said Suzanne Bellsnyder, an editor and publisher of two Panhandle newspapers and a Substack focused on rural issues. “Most infrastructure resources are paid with tax dollars, and there’s not a ton there.”
It’s not a new strategy. Major corporations regularly invest in communities and make charitable gifts big and small. Oil and gas companies in West Texas, for example, have donated to fire and police stations and hosted back-to-school backpack drives to weave themselves into communities.
Data centers have also capitalized on tax breaks from both state and local governments. A Texas Tribune analysis earlier this year found the state will forgo at least $3 billion in sales tax revenue over the next two years due to the exemption for the state’s booming data center industry.
Because of the negative public perception toward data centers, however, they still have some ways to go. In an August poll from The Texas Politics Project, a nonpartisan research hub focused on Texas government and politics, 57% of respondents said they would oppose the construction of a data center in their communities.
“I hope their intentions are good, and they’re not just trying to buy these communities off,” Bellsnyder said.
Tied into the community
It’s been two years since a tornado struck Temple, a city of just over 96,000 people that lies 70 miles north of Austin. The city was devastated. Hundreds of homes and businesses were severely damaged or destroyed. One of the buildings lost was the beloved Sammons Community Center, where senior citizens could come together for bingo, swimming and meals.
The price tag for the city’s recovery was high — $7.7 million.
Then, Rowan Digital Infrastructure stepped in. The company is developing a $4.2 billion data center campus with six facilities planned in East Temple.
Earlier this month, Rowan announced a $38 million investment in Temple’s public infrastructure, including $25 million to the South Temple Water Infrastructure Capital Program and $10 million for an aquifer storage and recovery program.
As for the Sammons Community Center, city leaders have proposed a $15 million bond to rebuild it. If voters approve the measure, Rowan has promised to put $3 million to help the project. It’s one of many actions that has made Rowan stand out to Tim Davis, Temple’s mayor, particularly since the company is not making money from the town yet.
“To go ahead and invest dollars into the community for a current need is very generous of them,” Davis said. “That tells me they want to work hard to have a positive impact, and they’ve chosen to help the city.”
Gaining public support is an important tactic for data center companies coming to Texas, and one that can’t be ignored. Over the last year, communities all over the state have voiced opposition to data centers coming to their areas — their main concerns being rising electric bills, losing water and housing issues. Some cities have prevented developments from moving forward. For example, a project in East Texas was pulled after community backlash and Lubbock leaders passed a 90-day moratorium on large-scale projects following a citizen-led petition.
Nathaniel Brown, director of public relations for Rowan, admits that integrating into a community hasn’t been an easy task. Brown said Rowan began hosting neighbor dinners every month for residents to talk with the construction team and ask them questions. The company has also held public hearings, open houses and have Facebook pages dedicated to its project updates.
“This development doesn’t happen in a vacuum. It needs to be able to fit into the community’s vision for their area,” Brown said.
Google has used a similar strategy. On top of community meetings, the tech company hosted a dinner in August to announce $6 million for nonprofits in Haskell, Stamford and Rule.
Suzie Shin, manager of data center sustainability programs for Google, said some of their investments are the company’s way of saying they are listening to the public’s concerns. The company has given millions toward major water infrastructure projects, as well as supporting local school programs. Most recently, the company announced a $4.5 million commitment to help Vernon, a town with less than 10,000 residents, fix a leaking pipeline.
Shin said she feels strongly about investing in modernizing water and wastewater infrastructure for the broader community, not just their data centers.
“I think there’s a win-win for communities,” Shin said. “Again, we have employees who live and work there. We are part of the community. It’s a great way to show the value and help improve outcomes, not only for the watershed but for the water users there.”
Bellsnyder, the newspaper publisher and resident in Spearman, said she’s spoken with some of the data center executives who visit the Texas Panhandle. She does think their intentions are to partner with the communities and make them better.
However, she’s still wary because of the boom-and-bust industrial patterns that have become all too familiar for rural Texas. Spearman was built by an oil and gas service company, Bellsnyder said, and when the business left, there wasn’t a long-term plan for the town.
“I don’t want our entire identities to be built around what one company can provide to us,” Bellsnyder said. “We still need to figure out ways to take care of our own business. Nobody likes taxes, but taxpayers will have to be invested in the community.”
Pros vs. cons
When the water tower went out in Turkey, a small Panhandle town of about 275 residents, people were without water for weeks and had to find places in other towns to live temporarily. Lynette Findley, the city manager, said everyone’s known for years that the tower would fail. However, with an annual budget of $500,000, the city had no way to pay for it to be fixed.
After weeks of no water, QTS Data Centers, one of the data center companies in the county, said it would replace it for the city. The cost for the company, which is a major global data center developer, is estimated to be between $3 million to $5 million.
“It was right before major conversations were starting on how QTS could help with our infrastructure,” Findley said. “I joke about it failing at the exact right time.”
For cities and towns facing a budget crunch, data centers are hard to turn away, especially as the Legislature continues to cut their resources. Kevin Hodges, the city manager for Childress, said the more restrictions on cities, the less money they have to put into the city’s needs.
Childress is facing a similar problem as Turkey. The small town of just over 5,834 people has been under a boil-water notice for a month, and the town issued a disaster declaration because of the problems. Local leaders have handed out bottled water to residents the last few weeks, and employees from IREN, one of the two data centers in town, stepped in to help.
“We’ve had some of our employees help distribute water, particularly to folks who might be challenged to get it, or to the health services, and the elderly,” said David Shaw, COO of IREN. “We’ve been in Childress for around four years now, so it was important to us to establish that connection with the community.”
Hodges, the city manager, blames the ongoing drought on their water issues because Greenbelt Lake levels dropped. While people in town blame the town’s water shortage problems on IREN and Lancium, another data center company in town, Hodges says they are helping.
“The fact of the matter is Lancium does not get any water from Greenbelt Lake,” Hodges said. “They get zero, but they’re willing to give us water from their own water wells.”
While Lancium does not take water from the lake, the company does have wells to take water from the nearby Blaine Aquifer. Hodges said Lancium is running a 16-mile pipeline from its campus to the Greenbelt storage tank, and the company will treat and provide the city with 1 million gallons of water a day — all with no cost to the town, Hodges said.
“They’re not taking,” Hodges said. “They’re providing.”
Hodges said the Legislature will look into more property tax cuts and other measures that could cause cities to lose money. That will hurt small towns, Hodges said, but data centers could give municipalities the money they wouldn’t normally get.
Davis, Temple’s mayor, agrees. He said municipalities are also impacted by inflation, and delivering essential services is expensive. However, the tax revenue generated by a data center will allow a city to set its own path financially, Davis said.
“If the ability to raise money is hampered, then those dollars have to come from somewhere,” Davis said. “Or, a community simply delivers less services to its residents. And I don’t think that’s acceptable to them.”
Still, Davis said leaders have to weigh the city’s capabilities and guard against any damage that could happen from a data center moving in.
Findley, the city manager in Turkey, said QTS and Lancium have promised to help with other needs too by providing funds for emergency services and the schools. She said all the contracts are with Hall County — not the city — and they are trying to navigate what has been put in their backyard.
“Data centers get a ton of negative publicity, so I’m sure it is a little self-serving on their end,” Findley said. “But to be honest, I don’t know what we would have done without their assistance.”
Alejandra Martinez contributed to this reporting.
Disclosure: Google has been a major financial supporter of The Texas Tribune. The Texas Tribune is a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in our journalism. Find a complete list of them and more information about our financial and disclosure policies here.
